Papua LNG Terminal

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Papua LNG Terminal, also known as Papua LNG, is a proposed LNG terminal in Central Province, Papua New Guinea, owned by a coalition of companies led by TotalEnergies. (The project is distinct from the ExxonMobil-led Papua New Guinea LNG Terminal, or PNG LNG).

Location

The terminal is planned for Caution Bay, Central Province, Papua New Guinea.

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Project details

• Operator: TotalEnergies
• Owner: TotalEnergies (38.1%), ExxonMobil (37.1%), Santos Limited (22.8%), JX Nippon Oil & Gas Exploration (2%)
  • Formerly: TotalEnergies (37.55%), ExxonMobil (37.04%), Santos Limited (22.83%), JX Nippon Oil & Gas Exploration (2.58%), Kumul Petroleum Holdings Ltd (back-in right of up to 20.5%), MRDC (back-in right of up to 2%)
• Parent: TotalEnergies (38.1%), ExxonMobil (37.1%), Santos Limited (22.8%), ENEOS Holdings (2%)
  • Formerly: TotalEnergies (37.55%), ExxonMobil (37.04%), Santos Limited (22.83%), ENEOS Holdings (2.58%), Kumul Petroleum Holdings Ltd (back-in right of up to 20.5%), Government of Papua New Guinea (back-in right of up to 2%)
• Location: Caution Bay, Central Province, Papua New Guinea
• Coordinates: -9.3392748, 146.9872856 (exact)
• Capacity: 5.6 mtpa
• Cost: US$13 billion
• Financing: Crédit Agricole was the financial advisor; partially financed by the U.S. Export-Import Bank
• Status: Proposed
• FID status: Pre-FID (2025)
  • Formerly 2024, 2023
• Type: Export
• Trains: 4
• Start Year: 2028
  • Formerly 2027

Expansion Project, Train 5

• Operator:
• Owner: Kumul Petroleum Holdings Ltd
• Parent: Kumul Petroleum Holdings Ltd
• Location: Caution Bay, Central Province, Papua New Guinea
• Coordinates: -9.3392748, 146.9872856 (exact)
• Capacity: 1 mtpa
• Cost: AUS$4.5 billion (US$3 billion)
• Status: Proposed
• FID status: Pre-FID
• Type: Export
• Trains: 1
• Start Year:

Background

The Total SA-led Papua LNG project in Papua New Guinea may export gas via Exxon Mobil Corp.’s existing PNG LNG facility to avoid the expense of building a new plant. According to ExxonMobil's InterOil, there is enough gas between the Elk-Antelope and P’nyang gas fields in Papua New Guinea to justify three LNG trains by 2023 to 2025, in addition to the existing two trains at PNG LNG. "The new trains could be for Papua LNG, PNG LNG or both combined. All those will be decided at a later time,” according to InterOil.

The terminal would be 5 mtpa. Total will have a 40% stake.

On July 21, 2016, ExxonMobil announced its intent to acquire InterOil of Papa New Guinea for US$2.5 billion. On February 22, 2017, InterOil confirmed the completion of this transaction. Front-end engineering design work is projected to start by early 2018, while the final investment decision is expected for the project by the beginning of 2019.

In April 2019 Total and its partners ExxonMobil and Oil Search signed a gas agreement with Papua New Guinea defining the fiscal framework for the Papua LNG Project. The agreement allows the partners to enter the front-end engineering design (FEED) phase of study that will lead to the final investment decision in 2020. The terminal will consist of two trains each with 2.7 mtpa capacity.

In April 2020 it was reported that the project will likely be delayed due to the Covid-19 pandemic. The energy and shipping brokerage Poten & Partners further disclosed that the final investment decision (FID) for the terminal had been delayed beyond the original FID timeframe of 2020-2021. It cited COVID-19, plunging demand and the crash in oil prices as the reasons for the delay.

In May 2021, Total said it had agreed with the Papua New Guinea government to proceed with the project, which had been delayed due to the coronavirus pandemic, with the objective of taking FID in 2023. Total added that it would re-mobilise teams involved in the project.

In August 2021, Santos Limited acquired Oil Search, granting Santos a 17.7% stake in the Papua LNG project.

In March 2023, Offshore Technology reported that JGC and Hyundai Engineering & Construction secured a downstream FEED estimation contract from ExxonMobil for the project.

In June 2023, TotalEnergies sold a 2.58% stake in the project to JX Nippon Oil & Gas Exploration, an affiliate of ENEOS group.

As of July 2023, the project was in the FEED phase of study, with a potential FID in 2024 and start year of 2028. The TotalEnergies-led project consortium was also reported to be sounding out potential lenders for the project financing. According to sources, a US$3-5 billion debt package was being discussed, with French bank Crédit Agricole identified as the project's financial advisor.

In January 2024, Crédit Agricole declared it will not finance the project. As of January 2024, three of Total’s biggest bankers (Crédit Agricole, BNP Paribas and Société Générale) have all ruled out involvement. This brings the total number of banks that have rejected the project to eight: BNP Paribas, BPCE/Natixis, Crédit Agricole, Société Générale, CIC/Crédit Mutuel, UniCredit, Commonwealth Bank of Australia and Westpac.

In April 2024, at a meeting between the CEO of TotalEnergies Patrick Pouyanné and the Prime Minister of Papua New Guinea, the FID date was moved up to 2025. According to Pouyanné, after receiving the first engineering, procurement, and construction (EPC) offers, more work with contractors is needed before commercially viable EPC contracts are obtained.

Expansion Project, Train 5

In March 2023, Kumal Petroleum Holdings, the national oil company of Papua New Guinea, said it was in talks with the developers of Papua LNG and Papua New Guinea LNG Terminal regarding the development of its own 1-mtpa train at the Papua LNG complex. According to the managing director of Kumal Petroleum, this project would help export gas from fields that otherwise might be stranded assets. The train's design would be similar to the other trains planned for Papua LNG. The total project cost is estimated to be AUS$4.5 billion (US$3 billion).

Opposition

The project is facing continuous criticism from environmental groups for being detrimental to biodiversity and threatening community rights, in addition to its climate impacts. In January 2024, it faced additional criticism from environmental groups in the US due to being partially financed by the U.S. Export-Import Bank.

Carbon Capture and Storage

In December 2022, TotalEnergies announced that it planned to build a carbon capture and storage (CCS) facility alongside the Papua LNG facility.

Articles and resources

External resources

• Papua LNG project — Financiers taking the risk, Institute for Energy Economics and Financial Analysis, May 23, 2023.

This 24-page report presents the risks involved — for potential project financiers and the debt-laden, environmentally fragile Pacific nation alike — in the Papua LNG export project that TotalEnergies and its partners are looking to sanction by the end of 2023.